Solicitors:
Baker Mannering & Hart (Appellant)
Tyndall & Co (Respondents)
File Number(s): AP 18/33263
Decision under appeal Court or tribunal: NSW Civil & Administrative Tribunal
Jurisdiction: Consumer and Commercial Division
Date of Decision: 04 July 2018
Before: P Boyce, Senior Member
File Number(s): HB 16/05215 and HB 16/38505
[2]
Background
This is an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act) against a decision made in the Consumer and Commercial Division of the Tribunal on 4 July 2018.
The respondents, Cameron and Judith Wallace (the builders), carry on business as a builder under the trading name C & JA Wallace.
On or about 14 January 2015 the appellant (the owner) entered into a cost plus building contract with the builders for the construction of a home on land at Byron Bay the owner had acquired in 2013.
Building work commenced in about February 2015 and continued until November 2015 at which time the builders suspended work by reason of alleged non-payment of invoices by the owner.
On 28 January 2016 the builders served Notice of Termination of the contract.
On 2 February 2016 the builders commenced proceedings in the Tribunal seeking payment of the amount of $255,584, being the amount of outstanding invoices, together with interest under the building contract in an amount to be calculated.
On 26 August 2016 the owner filed an application seeking an order that the owner not have to pay the builders the amount of $255,584. The owner alleged that she had sustained loss or damage, by reason of misleading and deceptive conduct on the part of the builders in breach of s 18 of the Australian Consumer Law (NSW), or alternatively by reason of breach of contract and duty on the part of the builders. The owner alleged the builders were in breach of the contract by failing to provide budget reports in accordance with the contract "so as to permit the owner to understand, control or influence the costs being incurred on work and charging excessive hours for himself". By 'himself' the owner was referring to Cameron Wallace, the first-named respondent.
The owner also alleged that, in breach of a term implied into the contract by reason of its character as a cost plus contract, the builders failed to use reasonable care and skill in managing the costs incurred in the work: in purchasing materials that were more expensive than was otherwise reasonably necessary and obtainable; in failing to obtain alternative quotes from potential sub-contractors; and in engaging sub-contractors otherwise than on a fixed price basis.
The owner calculated her loss at $251,639.32 on the basis:
1. That, had she not been misled as to the likely cost of the project, she would have entered into a fixed price contract for the completion of the work for a cost of $760,000; or alternatively
2. That if the builders had completed the works in accordance with their obligations and with reasonable care and skill in managing the costs, the costs of completing the work would have been $760,000.
The amount the owner had paid the builders was $547,555.32. The owner paid other builders $123,328 to complete the dwelling after the builders had ceased work. The owner alleged that some of the work carried out by the builders was defective and that the reasonable cost of rectifying the defective work was $85,172. The owner's calculation of loss in relation to the misleading and deceptive conduct and breach of contract claims was structured differently but ultimately reached the same result. That was that, if the owner was liable to pay the builders the amount of the builders' invoices, the owner would be worse off by the amount of $251,639.32 than if the owner had not relied upon misleading and deceptive conduct by the builders, or the builders had not breached the contract.
Both proceedings were heard together over 4 days in July and December 2017.
[3]
The Decision under appeal
By a decision dated 4 July 2018, the Tribunal ordered that the owner pay the builders the amount of $234,518.09 and that the builders pay the owner the amount of $26,505.62. The builders were given leave to press a claim for interest if so advised.
In the course of the decision the Senior Member determined (at [80] and [82]) that the owner repudiated the contract in that:
1. the owner failed to pay invoices presented by the builders in accordance with Schedule 1 Part B of the contract;
2. the owner failed to meet with the builders as part of the dispute resolution provisions of clause 24(b) and (c) of the contract despite the builder's attempts to do so;
3. the owner failed to provide evidence of her capacity to pay for the building works pursuant to clause 2(b) of the contract,
4. the owner gave notice of intention to repudiate the contract by service of a default notice and letter of intent on 17 January 2016
5. the owner breached the contract by permitting other contractors access to the site to carry out works notwithstanding the requirements of clause 8 of the contract that the builders were to have exclusive and uninterrupted possession of and access to the site for the performance of work; and
6. the owner failed to provide details of the expenditure relating to the owner's purchase of materials, which she was required to do pursuant to clause 17(a)(iii) of the contract which provided that the builders were entitled to a margin on the materials supplied by the owner and installed by the builders;
The Senior Member found (at [78]) that the builders were entitled to and did terminate the contract on 28 January 2016.
The Senior Member determined (at [96]) that, to the extent that the amount claimed by the builders reflected what the builders claimed were variations but which had not been approved in writing as required by clause 14 of the contract (and ss 6 and 7 of the Home Building Act 2009 (NSW)), the parties had agreed to vary the contract by mutual agreement; that
"The conduct of the parties post-contract was that they engaged in a distinct and mutually agreed procedural performance effecting variations to the contract orally and as the need arose,
and that
"The owner was continually on site fulfilling a desired course of conduct that she was integrally involved in the building work and making decisions that varied the works carried out from the plans that lacked detail".
After referring to the approval by Brereton J of Amalgamated Investment & Property Co Ltd (in liq) v Texas, International Bank Ltd [1982] QB 84 [we note that this is apparently a reference to his Honour's judgment in Waterman v Gerling Australia Insurance Co Pty Ltd [2005] NSWSC 1066 at [80] where his Honour was referring to estoppel by convention], the Senior Member held (at [97]):
"The Tribunal is satisfied that the performance by the owner and the builder in respect of the work involving variations to the planned and contracted work were oral variations to the contract because of the conduct of the parties throughout the period of the building works".
The Senior Member then held (at [98]) that:
"If the Tribunal were wrong in finding that the builder was allowed the variations, the builder was entitled to a quantum meruit in respect of the variations."
The Senior Member held (at [99]):
"The owner's invocation of the contract which she has repudiated [we infer this is a reference to the owner's reliance upon clause 14 of the contract] and the provisions of section 10 of the HBA to limit the amount to be recovered by the builder is not in any sense fair and reasonable".
The Senior Member then referred to Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234.
The Senior Member concluded (at [101]):
"The builder's work the subject of the quantum meruit claim is the subject of the builder's expert's report, Mr Hills. Mr Hills finds that the builder's claims for the variations are fair and reasonable and identifies the other circumstances, admittedly on the builder's instructions as to the circumstances that give rise to the claims".
At [102] the Senior Member stated:
"In his report Mr Oke of NRBCS [the owner's expert] makes no comment as to the reasonableness of the amounts charged by the builder in respect of the claim for variations/quantum meruit except that he has not been provided by the owner with any documentation by the builder that 'complies with the Variations-Changes to Scope of Works Post-Contract Date as detailed in Schedule 14 of the contract".
The Senior Member accepted each of the variations claimed by the builders at the amount set out in Mr Hills' report, save for a claim in the amount of $21,065.91 in respect of "time spent with owner on site". The Senior Member concluded that the builders had not satisfied the Tribunal that that was an amount that could be claimed by the builders under the contract or as a quantum meruit claim.
The Senior Member accepted (at [106]) that the builders had:
"exhibited comprehensive and exhaustive documentary substantiation of the costs accrued by the builder including invoices from sub-contractors, receipts and invoices for material and labour and the invoices and spreadsheets produced by the builder and provided to the owner except for the claim for the builder's time in attending to the owner".
At [129] to [133] the Senior Member set out the nature of the owner's claim for breach of contract other than defective works.
At [130] the Senior Member identified the express and implied terms alleged by the owner to have been breached by the builders:
(a) Clauses 1(d) and (e) which impose an obligation on the builder to provide regular budget reports, having the content set out in sub-clause (e);
(b) Clause 2A imposes an obligation on the parties as to management of costs so as to ensure costs are consistent with the owner's capacity to pay;
(c) Clause 17(c) requires payment claims by the builder to specifically identify various matters;
(d) In any home building contract there is an implied term that the builder carries out their obligations with care, skill and diligence and that under a costs plus contract, an obligation to manage costs.
The Senior Member identified the respects in which the owner alleged that the builders had breached these express and implied terms (at [131]):
(a) By failing to comply with the budget report and cost management provisions of the Contract, most importantly in the period up to October 2015. The evidence is that the owner repeatedly asked for estimates of completion costs from the builder;
(b) The estimates provided to the owner by the builder in October 2015 were very much incorrect, being $695,000 and then 6 weeks later increased by another $240,000;
(c) The builder stopped invoicing the owner, denying the owner the knowledge of the estimated future costs of the building work and the ability to manage the budget for the building works.
(d) The invoices that were issued by the builder were not generally possible to understand what specific work they related to, despite this being a requirement of the Contract;
(e) By inference from Expert Oke's report and admission by Expert Hill, the builder charged for excessive hours for himself and his employees, including an amount of $21,000 in "extra" time for discussions with the owner;
(f) The builder ordered unnecessarily expensive materials, such as, he ordered without the owner's approval an upgrade from domestic windows to commercial grade at a cost of about $30,000;
(g) In cross examination the builder admitted that he did not obtain quotes from sub-contractors and did not engage any contractor on a fixed price basis.
At [145] the Senior Member held that "the Tribunal is not satisfied that the owner is entitled to damages that she claims". The Senior Member then stated at [146] and [147]:
146. The claim arises from a cost plus contract that the Tribunal has found was terminated by the builder following the owner's repudiation. The termination of the contract usually operates as a discharge of the parties unless otherwise provided for in the Contract. The Contract between the parties does not preserve a continuation of any obligations on the parties following termination. The accrued rights during the term of the Contract are preserved.
147. In so far as the owners claim is for incomplete works, the Tribunal is not satisfied that under a costs plus contract such a claim can [be] warranted for the reasons as set out in the discussions in these reasons for decision.
The Senior Member addressed the owner's claim for the cost of rectifying defects at [134] to [139]. Mr Oke had prepared a report identifying and quantifying the defects in the amount of $96,147. Mr Oke and Mr Hills had prepared a joint report addressing 66 items. In paragraph [137] of his decision the Senior Member set out those 66 items in a table:
1. identifying in respect of each item whether the experts had reached agreement; and
2. ruling in respect of each item.
The Senior Member allowed a total of $20,080 in respect of defects. With the addition of builder's margin, which was agreed at 20%, and GST at 10%, the amount the Senior Member awarded to the owner in respect of defects was $26,505.62.
We note at this point that the Senior Member's rulings rejecting the owner's claims in respect of two defect items, numbers 2 and 61, are the subject of appeal. The remainder of the Senior Member's rulings on defects are not the subject of challenge.
The Senior Member addressed the owner's claim in respect of misleading and deceptive conduct at [113] to [128]. After referring to authorities concerning the effect of contractual disclaimers in relation to the question of reliance on representations the Senior Member concluded:
127. By her execution of the Contract, the owner has unequivocally stated that she has not relied upon such an estimate in entering into the Contract. The builder submits that is compelling evidence that no such reliance was made, supported by judicial authority and a claim for misleading and deceptive conduct cannot survive such compelling evidence against it with which the Tribunal agrees.
128. The Tribunal is not satisfied that the owner's evidence supports the Tribunal making a finding that the builder engaged in misleading and deceptive conduct and this element of the owner's claim is dismissed.
[4]
Scope and nature of internal appeals
Internal appeals may be made as of right on a question of law, and otherwise with leave of the Appeal Panel: s 80(2) of the NCAT Act.
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law:
1. Whether there has been a failure to provide proper reasons;
2. Whether the Tribunal identified the wrong issue or asked the wrong question;
3. Whether a wrong principle of law had been applied;
4. Whether there was a failure to afford procedural fairness;
5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations;
6. Whether the Tribunal took into account an irrelevant consideration;
7. Whether there was no evidence to support a finding of fact; and
8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.
The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on that basis that:
1. the decision of the Tribunal under appeal was not fair and equitable; or
2. the decision of the Tribunal under appeal was against the weight of evidence; or
3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where:
… there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve:
(a) issues of principle;
(b) questions of public importance or matters of administration or policy which might have general application; or
(c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;
(d a factual error that was unreasonably arrived at and clearly mistaken; or
(e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
[5]
Grounds of Appeal
The owner's Notice of Appeal identifies 17 grounds of appeal, of which the owner asserted 11 involved errors of law. In respect of the remaining 6 grounds (Grounds 2, 3, 8, 9, 10 and 13) the owner sought leave to appeal on the ground that the decision was against the weight of evidence.
To the extent that each of those 6 grounds asserts there was no evidence in support of a finding of the Tribunal, it is arguable that each also raises a question of law.
To some extent the grounds of appeal are overlapping and constitute alternative ways of stating the same proposition. It is convenient to summarise and re-state the grounds of appeal as follows:
1. That the Tribunal erred in concluding that the owner had repudiated the contract because the Tribunal had not considered the owner's case that part of the moneys claimed by the builders reflected the price of oral variations to which the builders were entitled, if at all, only on a quantum meruit basis and that the builders were themselves in breach of clauses 1(d), 1(e) and 2A(e) of the contract or had repudiated the contract;
2. The Tribunal erred in failing to find that clause 2A(e) limited the owner's potential liability;
3. The Tribunal erred in dismissing the misleading and deceptive conduct claim both because the contract did not involve an unequivocal assertion that the owner had not relied upon the builders' estimate and because the Tribunal did not consider the evidence which supported the owner's assertion of reliance.
4. The Tribunal erred in allowing the builders' claims for variations:
1. By not considering and making no findings regarding any of the specific variations and by failing to determine whether they were requested or agreed to by owner;
2. In finding that Mr Hills had found the builders' claims fair and reasonable when Mr Hills' evidence does not, properly understood, say that;
3. In failing to recognise that Mr Oke had set out his opinion on the reasonableness of a number of claims for variations, many of which were less than Mr Hills' assessment.
1. That the Tribunal erred in relation to Items 2 and 61 of the schedule of defects by failing to give any or any adequate reasons for its decision on those items;
2. That the Tribunal erred in dismissing the owner's claim for damages on the basis that it was a claim in respect of incomplete work and in failing to acknowledge that the alleged breaches relied upon by the owner had all occurred prior to any termination of the contract.
We will consider each of the grounds of appeal as re-stated above.
[6]
Ground 1 - Did the Tribunal err in concluding that the owner had repudiated the contract
The Senior Member's conclusion that the owner had repudiated the contract was founded upon a number of findings of breach of the contract on the owner's part as outlined above. However, the Senior Member did not consider whether those breaches separately constituted a repudiation of the contract. The finding of repudiation was made by reference to all the breaches, globally (although there is some inconsistency between [80], where the repudiation is found to result from failure to pay invoices and entering on the site and permitting others to enter the site, and [82] where all of the matters set out at [13] above were referred to). To that extent, the finding of repudiation was predicated on the proposition that the owner was in breach of the contract by failing to pay the claims made by the builders on 2 and 15 December 2015 and 15 January 2016.
The owner submits that the Tribunal erred in failing to determine whether the owner was liable to make those payments to the builders. The owner argued that she was not liable to make those payments by reason of the builders' breaches of the contract including failure to comply with clauses 1(d) and 1(e), clause 2A, 17(c), and what the owner alleged was an implied term that the builder under a cost plus contract has an obligation to manage costs with due care, skill and diligence.
Clauses 1(d) and (e) of the contract provide:
(d) The Builder will regularly provide to the Owner a written report on the cost of the works. This will be known as the budget report. If no specific period is agreed by the parties then a budget report will be done once per calendar month. See Schedule 1 Part D where a date for providing the Budget report can be agreed. The budget report is to be provided no later than five (5) days after this date.
(e) The budget report will include:
(i) details of the work done, costs known and moneys paid or payable as at the date identified in the budget report;
(ii) a summary of work being performed and still to be performed;
(iii) details of work about which the Owner needs to provide instructions in order to allow the works to proceed; and
(iv) a revised estimated total cost of works.
The estimate above will be based on the Builder's knowledge at the time the budget report is done. The Builder is to use reasonable care in preparing the budget report. However the revised estimated total cost of works provided in the budget report is not a lump sum or guaranteed amount and is subject to the impact of the costs and the fees payable or incurred under the contract. Refer to Clause 30 also.
Clause 2A of the contract provides:
2A Joint Responsibilities of the Builder and Owner
The parties acknowledge the fact that:
i) the amount payable by the Owner under this contract is not as at the date of the contract known;
ii) the total amount payable under the contract will not necessarily be ascertainable during the course of the contract; and
iii) the amount to be paid by the Owner is the result of the costs incurred by the Builder, the Builder's fee or return and the impact of the GST on the work done.
The parties agree in order to manage this situation that:
(a) they will conduct regular meetings in order to:
(i) review the work done and costs incurred;
(ii) review the work to be done and the costs thought to be payable for such work; and
(iii) make decisions and choices regarding work under the contract so that the work to be paid for by the Owner is consistent with the Owner's capacity to pay.
(b) they will, in the event that there is a conflict between the costs of the work as set out in the budget report and the Owner's capacity to pay, adjust the work to be done so that the conflict is eliminated and as such the work to be done is work for which the Owner has the capacity to pay.
The adjustment to the work is to be recorded in writing and signed by both parties and treated as a variation under Clause 14.
(c) they will act co-operatively and in a manner which progresses the works.
(d) either party may require a meeting to be held within five (5) days of a written request for a meeting. Both parties must attend such a meeting. The party calling the meeting will identify issues to be covered at the meeting.
The Builder will provide a report on the matters raised at the meeting within a reasonable time but no later than ten (10) business days after the meeting.
(e) for the purpose of improved certainty the scope of work to be completed by the Builder is limited to that work for which the Owner has made or can make and does make payment. Consequently any work which is not able to be paid for by the Owner will be eliminated from the work to be carried out by the Builder.
Clause 17(c) relevantly provided:
…
(c) A claim for payment by the Builder is to identify:
(i) the period during which work was carried out and the work for which payment is required;
(ii) the Cost of Works for works performed in this period;
(iii) a brief description of any variations relative to the initial scope of work under the contract; and
(iii) the fees payable under Schedule 1 Part B
The owner submitted that the builders had failed to issue invoices on a regular basis and in particular had failed to issue any invoice between 22 July 2015 and 11 November 2015.
Prior to 11 November 2015 the builders had invoiced the owner a total sum of $359,555.22, the last invoice having been issued on 22 July 2015, although the owner had continued making payments after that date. By 8 October 2015 the owner had paid the builders $547,555.32 with the result that invoices issued by the builders on 11 and 14 November 2015 were covered by moneys the owner had already paid.
The owner also submits that since about May 2015 she had been repeatedly seeking from the builders an updated completion cost as required by clauses 1(d) and (e) of the contract. The owner points to evidence indicating that on 16 October 2015 the builders had suggested that the total cost of building works would be $695,000, that on 11 November 2015 the builders' estimate had increased to $796,000 and that by 7 December 2015 the builders' estimate had increased to $933,000.
The owner submitted that, in failing to provide regular invoices and in failing to keep the owner informed of the likely increase in cost of the work, the builders had breached the contract and caused the costs incurred by the owner to be greater than they might otherwise have been. In this regard the owner submits that she could have made different choices in the course of the build. Counsel for the owner referred to the choice of a custom built kitchen rather than an "IKEA" kitchen and also to the fact that the builders had installed commercial grade rather than domestic grade windows which, the owner submitted, were significantly more expensive.
The owner also relied upon the alleged implied term that the builders would manage costs and submitted that the evidence showed that the builders did not get alternative quotes but just utilised their usual tradesmen.
The owner further submitted that at least $90,000 of the invoices submitted by the builders reflected oral variations in respect of which, by reason of section 10 of the Home Building Act 2009 (NSW), the builders were not entitled to enforce any contractual remedy, regardless that ultimately the builders might be entitled to recover a quantum meruit in respect of that work. The owner did not identify how much of the amount attributable to oral variations had been included in the invoices which the owner had paid.
Although the Senior Member recorded (at [62]) that the owner had not and did not deny the validity of the builders' Notice of Suspension, before the Appeal Panel the owner disputed that any such concession had been given.
The builders submitted that it was not correct to say that the Tribunal failed to consider the matters raised by the owner and noted that the Tribunal had made "comprehensive reference to the respective claims, position and evidence [of] the parties in respect of the finding of repudiation at [57] to [82] of its decision".
The builders appeared to concede that the Senior Member had not made "expansive reference" to the issues which the owner asserts the Tribunal failed to consider, but submitted that "the reasoning, and thereby sufficient consideration as to a finding of repudiation are evident in the decision".
We are persuaded that, although the builders are correct to say that the Tribunal did acknowledge the issues raised by the owner, the Senior Member did not adequately explain why those matters were not relevant to the determination that the owner had repudiated the contract. The Senior Member clearly did not assess the owner's claims of breach of contract by the builders and did not address the question whether those alleged breaches, if established, would have been sufficient justification for the owner's failure to make further payments or for the owner's other conduct referred to in paragraphs [80] and [82] which the Senior Member determined constituted a repudiation of the contract.
We note that, as the Senior Member recorded, on Sunday 17 January 2016 at 6.14 pm the owner wrote to the builders and their solicitors referring to earlier correspondence and stating:
"If you would still like to hold a meeting to discuss strictly how Mr Wallace is going to rectify the mentioned building issues, and still unexplained exorbitant budget blowout then I will oblige with either a representative or personal attendance.
However, if Mr Wallace retains the position of not admitting to the clearly highlighted and blatantly obvious issues relating to the build, then I will be exercising my right to terminate my contract with Mr Wallace as of 5 pm Wednesday."
"If no such meeting is held or if the remedy isn't sufficient, then I will require Mr Wallace to fully vacate the site by 12 pm Thursday."
In many circumstances a letter in those terms would, regardless of other issues, constitute a repudiation of the contract. However, the Senior Member did not engage in any consideration of that issue. In our view the Senior Member's reasons are not adequate to justify the conclusion that the owner repudiated the contract.
The principles relevant to the adequacy of reasons as identified in Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 were summarised as follows in Moussa Enterprises Pty Ltd v Stanford [2015] NSWCATAP 99 at [30]:
1. The giving of adequate reasons lies at the heart of the judicial process. Failure to provide sufficient reasons promotes "a sense of grievance" and denies "both the fact and the appearance of justice having been done", thus working a miscarriage of justice.
2. The extent and content of reasons will depend upon the particular case under consideration and the matters in issue:
3. While a judge is not obliged to spell out every detail of the process of reasoning to a finding, it is essential to expose the reasons for resolving a point critical to the contest between the parties.
4. The reasons must do justice to the issues posed by the parties' cases. Discharge of this obligation is necessary to enable the parties to identify the basis of the judge's decision and the extent to which their arguments had been understood and accepted.
5. Because a primary judge is bound to state his or her reasons for arriving at the decision reached, the reasons actually stated are to be understood as recording the steps that were in fact taken in arriving at that result. Where it is apparent from a judgment that no analysis was made of evidence competing with evidence apparently accepted and no explanation is given in the judgment for rejecting it, it is apparent that the process of fact finding miscarried.
To these principles may be added the observation of Adamson J in Orr v New South Wales Land & Housing Corporation (No 2) [2018] NSWSC 1909 at [66] that there is a "minimum requirement in the context of a potential appeal: that the appellate body must not be left to speculate from collateral observations as to the basis of a particular finding".
Mr Manner, who appeared for the builder, referred to a number of decisions which in his submission established that the reasons of the Tribunal were sufficient in that "the claims were considered, as they are referred to and a determination made". We do not accept that submission. The authorities referred to by Mr Manner, which it is not necessary to identify, do not support the proposition that it is sufficient provision of reasons for a decision to identify an issue and express a decision on that issue. It is necessary to set out sufficient of the process of reasoning in respect of the relevant issue to enable the parties to understand why the particular decision has been reached. In our view the Senior Member's reasons do not satisfy that requirement.
Accordingly we uphold the first ground of appeal.
[7]
Ground 2 - Failure to find that clause 2A(e) of the contract limited the owner's liability
Clause 2A(e) is set out above. It is clearly a provision included in the contract to assist in managing the cost plus nature of the contract. Clause 2A, read as a whole, is clearly intended to operate in circumstances where the parties maintain, in the course of the contract, close supervision over the costs being incurred as work proceeds.
Sub-clause (e) is in our view included in order to enable the builder to cease to carry out work if it becomes apparent that the owner is not in a position to meet the costs of further work. The clause assumes that the cost of work carried out by the builder will not advance beyond the owner's capacity to pay without the parties being aware of that fact.
In this case the owner was seeking and not receiving updates concerning the progress of the work during the period from July to October 2015. However, even at 16 October 2015, the anticipated total cost of the build as identified by the builders was not beyond the owner's capacity to pay, as recorded in the contract which identified that the owner had $580,000 cash and $100,000 to be advanced on mortgage by a lending institution. As noted above, as at 16 October 2015, the anticipated total cost of the build was $695,000, only marginally above the identified available funds.
The reason for the rapid increase in anticipated final costs between 16 October 2015 and 15 January 2016 was not explored in the Tribunal's reasoning or in any evidence brought to the attention of the Appeal Panel.
In dealing with the owner's reliance on clause 2A(e) the Senior Member recorded the owner's submission that clause 2A(e) limited the totality of claims which could be made against the builder to $680,000 or less. The Senior Member then (at [93]) recorded the builders' submission that the owner's position was a misapplication of the contractual term and that the builders' position was that:
1. The owner had represented she could obtain $680,000 for the works;
2. She also represented that she could borrow additional funds to purchase floor coverings and window furnishings, but that this was not the case as "the owner needed an additional loan to accommodate the revisions to the scope of works which she had effected and well before the expenditure of the amount that she professed to possess", with the result that the builders were required to provide information to the owner's bank in support of an approval for a loan to continue with the building works;
3. The builder had an expectation that funds of $680,000 were still available. That cost had not been reached when the builders were assured by the owner that finance would be forthcoming to take into account the revised budget; and finally
4. "The higher completion amount was caused by the owner's extensive and continued additions and revision of the works as they progressed".
The Senior Member then held (at [112] [1] ):
"The Tribunal finds that at all times the works undertaken for the owner by the builder were 'underpinned' by the original contractual assurances for $680,000 and then subsequently the additional loan by the builder's revised estimates for completion".
It is not entirely clear what the Senior Member meant by the finding that the builders' contractual estimates were "underpinned" by the original contractual assurances and subsequently the additional loan, as the Senior Member did not identify what additional loan he was referring to or whether that loan had been obtained. It is apparent that this paragraph repeats a proposition included in the builders' written submissions to the Tribunal.
The owner submits that:
"What the owner suffered here is exactly the circumstance clause 2A(e) is designed to protect against. She was misled as to the total costs of the works throughout the project when costs were being incurred, she was given no informed opportunity to minimise or limit those costs, and then, near the end of the project, she is suddenly advised the estimate she has been given is dramatically wrong and demand is made on her well in excess of her capacity to pay".
The owner submitted that there was no evidence supporting the finding at [112] and that "in fact the evidence supported the contrary conclusion that the owner did not have the capacity to pay for work done beyond about $695,000". The owner submitted that therefore the additional work was beyond the scope of the contract.
The builders submitted in response that the evidence disclosed that Mr Wallace had been told by the owner, prior to entry into the contract, that "I have $680,000 available and I can get more if necessary". The builders submitted that by October 2016, at which time the builders were aware that the owner was seeking further finance, the builders' "expectation that funds were still available under the original agreement at a total of $680,000 which had not yet been reached, was then supplanted by the assurance that finance was forthcoming which would take account of the new budget".
The builders submitted that "the new finance approval linked to Mr Wallace's revised estimates for completion gave Mr Wallace no reason to doubt [the owner's] ability to pay following loan approval".
We do not consider that, on its true interpretation, clause 2A(e) would have the effect of capping the owner's potential liability under the contract at $680,000 or at that amount plus any loan which the owner was able to obtain.
Clause 2A(e) would come into operation when it became apparent that an owner did not have the financial resources to meet further costs and would provide the builder with the opportunity to cease to carry out further work at that point. Clauses 2A(a)-(d) are intended to ensure that as far as possible the parties jointly monitor the costs of the work as it proceeds and adjust the work to avoid a situation where clause 2A(e) becomes operative.
However the inclusion of clause 2A in the contract (and clause 2A(e) in particular) does suggest greater significance for the provisions of clause 1 which require the builders to provide regular reports. Clause 2A is not only for the benefit of the builders. It also permits the owner to terminate the building works and instruct the builder to cease work in circumstances where the owner could not obtain sufficient funds to meet ongoing building costs.
If that opportunity was not to be illusory it was important that the builder provide reliable and timely estimates of ongoing building costs and cost to complete. Even if, as the builder submitted, the dramatic and rapid escalation in estimated completion cost after November 2015 was "a result of [the owner's] extensive and continued additions and revisions" the contract contemplated that the owner would be in a position to call a halt to works at any time when she realised that continued construction would exceed her capacity to pay.
There was on the evidence a factual dispute concerning what the owner said to the builders concerning her ongoing capacity to pay. The Senior Member did not make any findings concerning that conflict in the evidence. Nor did the Senior Member make findings concerning the operation of clause 2(b) in that context. Clause 2(b) provides that the owner must provide to the builders upon request reasonable evidence of the owner's capacity to pay for the works and that a failure to do so may allow the builders to suspend work.
For those reasons the Senior Member's reasoning concerning the operation of clause 2A(e) is insufficient. The Senior Member did not err in failing to find that clause 2A(e) limited the owner's liability but he did err in failing to address the question whether the builders by their conduct had denied the owner the opportunity to exercise her entitlement under clause 2A(a) -(d) to monitor the cost and adjust the work as it proceeded, and her entitlement under clause 2A(e) to bring works to a halt when she was unable to meet the cost. We would not uphold Ground 2 but we consider the failure to address this question is a further manifestation of the inadequacy of the Senior Member's reasons for decision which we have addressed in respect of Ground 1.
[8]
Ground 3 - Misleading and deceptive conduct
The Senior Member's finding concerning the owner's misleading and deceptive conduct claim is set out above (at [30]).
The owner submits that the contract does not contain any unequivocal statement on the part of the owner that she had not relied upon the builders' estimate of building costs in entering into the contract.
The builders point to clause 30 of the contract which provides:
If an estimation of the total amount that will become payable by the Owner under this Contract is or has been made either before or after the date of the Contract THEN such estimation will be or will have been made on the basis of the information, as to the detailed and complete nature and extent of the works, then available to the Builder. However the estimation will not be of any contractual significance whatever between the parties or deemed to be a a representation innocent or otherwise as to the amount or approximate amount that will become payable by the Owner.
Page 1 of the contract included the statements:
"The contract sum or the amount to be paid by the owner is not known as at the date of the contract".
"The amount of money payable to the builder by the owner is dependent upon the costs incurred by or payable by the builder in carrying out the work under the contract".
Any figure nominated or stated below is only an estimate and is provided specifically subject to the terms of clause 30."
The owner's initials were inserted under those statements. The amount of $600,000 was also inserted on that page, above the words "Estimated cost of works and fees and GST pursuant to Schedule 1 Parts A and B".
The owner also relied upon a preliminary estimate given by the builders on 13 October 2014 of $586,295 including a 10% allowance for contingencies.
The owner submitted that both experts had given evidence in the proceedings that a reasonable estimate of the cost of the building work, based on the documentation available at the time of the contract, was about $760,000 and that, by providing the preliminary estimate, and by including the figure of $600,000 in the contract, the builders had represented on two separate occasions that the work could be completed for $600,000. The owner submitted that the builders had not sought to establish that either representation was made on reasonable grounds and that the representations were therefore deemed to be misleading and deceptive (see s 4 of the Australian Consumer Law (NSW)).
The owner gave evidence (at paragraph 23 of her affidavit) that she had relied upon the estimates in entering into the contract:
"I would not have signed the contract if the estimate was much higher than the amount Cameron [Mr Wallace] inserted [in the contract] or if I had thought Cameron wasn't going to be able to build the project for close to that estimate. I would have gone to other builders to get the project done for an amount at or closer to my budget."
The owner submitted that clause 30 does not involve an unequivocal statement by the owner that she had not relied upon the estimate and submitted that the Tribunal's conclusion that the contract had that effect was a mistake of law.
The builders submitted that the Tribunal's conclusion is a conclusion of fact and that clause 30 was an express statement by the owner that she did not consider the estimate in the contract to be a representation of any kind.
The builders also refer to paragraph [122] of the decision in which the Senior Member set out the builder's contentions:
that the estimates were reasonably based upon the information available at the time and were supported by the expert evidence of Mr Hills;
that the estimates were always only estimates and were never firm prices;
that the estimates were based upon the limited information available at the time they were made and the "unquantified prospect of the owner's own project involvement"; and
furthermore, that during the process leading to the making of the contract the owner's architect had been advising the owner.
Paragraph [122] of the decision concludes:
"As such they [the representations] cannot be characterised as deceptive or misleading and in terms of the time of three months [between the initial estimate and the contract] there is an absence of a causal connection and the claim of misleading and deceptive conduct must fail at the outset; see Johnson Tiles Pty Ltd (ACN 004 576103) v Esso Australia Ltd [2000] FCA 1572 at [64]. 'There must be a logical causal connection between conduct and some hypothesised error … There is an evaluative judgment involved'."
The builders submitted that paragraph [122] constitutes a finding by the Senior Member that the representations were not misleading and deceptive. We do not understand the paragraph in that way. In our view, paragraph [122] is clearly a restatement of the builders' submissions, it is not an explicit finding and the Senior Member does not at any point indicate that he was making findings in accordance with the matters set out in that paragraph.
The Senior Member referred to the builders' acknowledgment "that contractual clauses may not exclude the operation of the Australian Consumer Law [but that] the law recognises the evidentiary component of disclaimers going to the question of reliance" and referred to Keen Mar Corp Pty Ltd v Labrador Park Shopping Centre Pty Ltd [1989] FCA 54; (1989) 67 LGRA 238; Netaf Pty Ltd v Bikane Pty Ltd (1990) 26 FCR 305 at [22]; and Christie v Mastores [2016] WADC 137 at [549].
However the Senior Member did not give any real consideration to the question whether the owner's evidence that she would not have entered into the contract but for the representation should be accepted.
Although we accept that clause 30 does contain an explicit statement that the statement of an estimated building cost should not be taken as a representation, that is not inconsistent with Mr Wallace having conducted himself so as to indicate to the owner that the statement was a representation or with the owner having taken the estimate as a representation of likely building costs and entered into the contract in reliance upon that representation. Clause 30 was relevant to the assessment of the owner's evidence, and consideration whether it should be accepted, but it could not, on its own, resolve the question of reliance.
We consider that the Senior Member's reasons, in failing to address the owner's evidence of reliance or the evidence surrounding the earlier estimate and the execution of the agreement, are not adequate. Accordingly we uphold this ground.
[9]
Ground 4 - Variations
We note that, as we have set out above, the builders would only be entitled to claim for variations, which were not the subject of written instructions or approval by the owner, on the basis of quantum meruit, that is the fair and reasonable cost of work which the owner had requested and accepted the benefit of.
The owner submits that the Tribunal did not make any findings regarding any of the specific variations claimed by the builders or determine whether they were requested or agreed to by the owner. The owner submits:
"The Tribunal simply made a 'generic' finding that the variations claimed by the builder were 'required' by the owner. It did not consider the particular variations claimed, and whether they were requested or agreed to."
The owner refers by way of particular example to the windows upgrade from domestic to commercial grade at an increased cost to the owner of $26,318.80, and submits:
"Nowhere does the Tribunal consider the evidence concerning whether, or conclude that, the owner wanted this change."
The owner submits:
"To the extent the Tribunal in fact concluded each variation was requested or agreed to by the owner its reasons are non-existent or inadequate."
In response the builders submit:
"The reasoning adopted by the Tribunal in relation to the variations is extensively detailed in [94] to [103] of the decision, including at [103] a table listing the individual variation claims and detail including quantum and the basis of agreement."
and that the:
"Varied descriptors contained within the table at [103] could only have been manifested by way of consideration of the evidence."
Paragraph [103] of the decision contains a table in which the Senior Member has recorded the conclusions set out in a report of Mr Hills, the expert retained by the builders. The Senior Member states at the commencement of paragraph [103]:
"Mr Hills finds in respect of the builder's claims that the amounts claimed for variations/quantum meruit are:"
and the table follows.
The owner is correct in submitting that the Senior Member has not specifically addressed any contested evidence concerning whether or not the items set out in the table were matters to which the owner had agreed or requested. Mr Hills' report contained detailed statements as to the circumstances in which each claimed variation was requested or agreed to by the owner. The Senior Member noted in paragraph [101] that Mr Hills had identified those circumstances on the basis of the builders' instructions as to the circumstances that give rise to the variation claims.
Although the statements by Mr Hills were not direct evidence of the circumstances in which the variations were requested or agreed to, they were hearsay evidence, which is admissible in the Tribunal, and the Senior Member appears to have accepted them as evidence of those matters.
We were referred to paragraph 72 of the owner's affidavit in which she explicitly denied that she had requested commercial grade windows and thereby put in issue Mr Hills' statement at paragraph 7.2.14 of his report that the owner had approved the change and had approved the increase in price.
The owner did not draw to our attention any evidence filed on behalf of the owner by which any of Mr Hills' statements concerning other variations claimed by the builders were contested.
We accept that the Senior Member's reasons, for accepting Mr Hills' report as establishing that the window upgrade was a variation which the owner had requested, were not adequate. The only reasons provided, in the table to paragraph [103] was the statement "Ärchitects request agreed by owner". In circumstances where the owner had explicitly denied that she had approved the change to commercial grade windows, it was necessary for the Senior Member to address that evidence, and if it was not accepted, explain why it was not accepted. The Senior Member did not do so and thereby made an error of law. We allow the appeal in respect of the amount awarded by the Senior Member in respect of variation 7.2.14 claimed by the builders. The amount identified by Mr Hills, and allowed by the Senior Member, as the increased cost attributable to the window upgrade was $26,318.80.
As, apart from the question whether the owner agreed to the installation of commercial grade windows, the owner has not pointed to evidence where the owner put in issue the matters set out in Mr Hills' report, we are not persuaded that the matters set out in section 7.2 of Mr Hills' report, apart from item 7.2.14, were genuinely in contest and do not consider that it was necessary for the Senior Member to enter upon any assessment of contested evidence in respect of those matters.
In those circumstances we are not persuaded that the Senior Member made an error of law by not considering and making findings regarding the specific variations, other than item 7.2.14, or that the Senior Member's conclusions were against the weight of evidence.
The owner is on stronger ground in challenging the Senior Member's findings that Mr Hills had found the builders' claims for variations were fair and reasonable and that Mr Oke had made no comment as to the reasonableness of the amounts charged by the builders.
The builders did not point to evidence where Mr Hills stated expressly that the amounts claimed were fair and reasonable. The builders submitted that Mr Hills had considered the amount claimed by the builders to be validly and properly claimed, and referred to in section 7.2 of Mr Hills' report. The builders submitted that the distinction between the conclusion that variations were "fair and reasonable" and that the amount was "one which may be validly and properly claimed" was an "exercise in semantics and lacking in substantive merit".
Mr Hills did not in section 7.2 of his report state that any of the amounts claimed by the builders were amounts which "may be validly and properly claimed". Mr Hills rather provided a breakdown of each amount claimed by the builders. We accept that Mr Hills has thereby implicitly accepted that the amounts recorded reflected costs incurred by the builders and the cost of the builders' time charged at the rate set out in the contract. In the absence of challenge by the owner's expert, Mr Oke, we would not conclude that the Senior Member's acceptance of Mr Hills' statement of the value of the variations was not supported by adequate reasoning or that his decision in that regard was against the weight of evidence.
However, contrary to what the Senior Member stated at [102] (set out at [20] above), it is not correct to say that Mr Oke made no comment as to the reasonableness of the amounts charged by the builders in respect of the claim for variations.
As the owner points out, Mr Oke did, in his first report, provide an assessment of the cost of carrying out a number of the variations, and assessed sums substantially less than Mr Hills had allowed. Those items, as far as we are able to identify them from Mr Oke's report, were:
7.2.1 in respect of which Mr Hills calculated a cost of $939 and Mr Oke assessed the reasonable cost at $400;
7.2.2 in respect of which Mr Hills calculated $4,322 and Mr Oke $1,325;
7.2.11 in respect of which Mr Hills calculated $4,286 and Mr Oke $3,150;
7.2.12 in respect of which Mr Hills calculated $2,873 and Mr Oke $1,688;
7.2.16A in respect of which Mr Hills calculated $502 and Mr Oke $435; and
7.2.16B in respect of which Mr Hills calculated $585 and Mr Oke allowed $150.
Mr Oke did not provide any assessment of the fair and reasonable cost of any other variations claimed by the builders.
The difference between the estimates of Mr Hills and Mr Oke as identified above amounts to $6,359. Part of the difference may be explained by the fact that Mr Oke does not appear to have included builder's margin, which Mr Hills allowed at 11%, or GST, which would add a further 10%. If those amounts are added to Mr Oke's calculations the difference is reduced to $4,780.
We accept the owner's submission that the Senior Member did not provide adequate reasons for accepting Mr Hills' estimates for the six items in respect of which Mr Oke provided estimates and that the Senior Member made an error of law in respect of those items in that the Senior Member failed to provide any reasons to demonstrate that he had considered Mr Oke's evidence or for preferring Mr Hills' evidence to that of Mr Oke.
Accordingly we uphold the appeal in respect of the award of $26,318.80 for the window upgrade and in respect of the assessment of the value of the six items referred to at [113] above.
Other than in respect of those six items and the window upgrade, we do not find error in the Senior Member's assessment of the value of variations or the decision to award the builders the value of those variations.
[10]
Ground 5 - Items 2 and 61 in the schedule of defects
The Senior Member dealt with the owner's defects claim in paragraphs [134] to [139]. The Senior Member referred to the joint expert report which took the form of a Scott Schedule signed by both experts, in which the experts identified whether they agreed or disagreed with respect to each item alleged by the owner to be defective.
The Senior Member ruled on the 66 items referred to in the joint Scott Schedule by setting out his conclusions in a table. In the table the Senior Member also set out what he described as the "Experts Agreement". As noted above, the owner only challenged the Senior Member's findings in respect of the items numbered 2 and 61.
Item 2 related to the main bedroom window frames to the north elevation. Mr Oke's report identified that the builders had supplied and installed commercial grade windows and that the windows were not to the configuration shown on the plans. Mr Oke calculated the cost of rectification at $8,144 before builder's margin and GST. It is not clear to what extent this item overlaps with the upgrade of window frames and the increased cost of that upgrade which were the subject of item 7.2.14 in the builders' claim in respect of variations. The owner asserted that the window frames supplied were defective in that they were not in accordance with the contractual specification. The builders submitted that the change reflected oral instructions from the owner and her architect. As recorded in the joint report, the experts had not reached agreement in respect of this item, each maintaining their position as recorded in their respective reports. The Senior Member recorded, in the column headed "Experts' Agreement", "No, supplied under architect and owner's direction as a variation" and ruled "Nil; Tribunal satisfied that supplied as a variation".
Item 61 related to a retaining wall. The owner asserted the construction of the wall had not been carried out in a proper and workmanlike manner. The builders asserted the construction of the wall was not defective but was rather incomplete work. As recorded in the joint report, the experts had maintained their position as recorded in their respective reports. The Senior Member recorded in the column headed "Experts Agreement" "No defect; incomplete works" and ruled "Nil; On the evidence the Tribunal is not satisfied that this item is a defect".
The owner submits that the Senior Member's reasons for rejecting her claims in respect of items 2 and 61 were not adequate.
The builders referred to a statement of Stein JA, with whom Meagher JA and Handley JA agreed, in Jung v Son [1998] NSWCA 120, acknowledging that reasons must be provided in respect of issues "critical to the case" and indicating that "reasons must be sufficient to enable an appellate Tribunal to gain a proper understanding of the basis of the verdict".
The builders pointed out that his Honour had stated that "a Judge does not have to state reasons for every aspect of the case" and submitted:
"the items to which the appellant refers in this ground fall clearly into the latter category [that is an aspect of a case in respect of which the Judge does not have to state reasons] in that each is a simplistic matter of adoption of one or other of the experts' views in matters which are not central to the overall claim."
It may be accepted that brief reasons may be adequate in respect of individual items in a lengthy Scott Schedule. Nevertheless, where two experts disagree in respect of a particular item, it is not sufficient simply to state a conclusion, it is necessary to provide justification for the decision to prefer the evidence of one expert over the other, either generally or in the specific case.
We reject the builders' submission that the determination of the existence and value of defects is "a simplistic matter of adoption of one or other of the expert views". The requirement for reasons is greater than that. What is required is at least some justification of the decision to adopt the views of one expert over the other. Accordingly we find the Senior Member made an error on a question of law in relation to defect items 2 and 61 and uphold the appeal in respect of the rejection of the owner's claim for the cost of rectifying those items.
[11]
Ground 6 - Dismissal of the owner's claim for damages on the basis that it was a claim in respect of incomplete work
For the reasons we have outlined in relation to Ground 1 above, we have concluded that the Senior Member made an error of law in failing to provide adequate reasons in relation to the owner's claim in respect of breach of contract. To the extent that the Senior Member dismissed the owner's claim as a claim for incomplete works, it is clear in our view that the Senior Member, in the relevant parts of the decision, misconstrued the owner's claim.
The owner's claim was not a claim in respect of incomplete works, it was a claim for compensation for breach of contract. The measure of compensation claimed was calculated by the owner by reference to the cost to complete the works requested under the contract. That is not the same thing.
Accordingly, we uphold the appeal on this ground also.
[12]
Disposition of the Appeal
The consequence of the foregoing findings must be that the appeal is allowed and the decision is set aside save insofar as it deals with variations other than the window upgrade and the six variations addressed by Mr Oke, as referred to at [113] above, and the assessment of defect claims other than items 2 and 61.
The owner submitted that, in the event the appeal was upheld, the Appeal Panel should itself determine the outstanding issues as permitted pursuant to 81(1)(d) and (2) of the NCAT Act. We are not persuaded that there would be any saving of time or cost in doing so as, although the parties have put before us the entirety of the evidence before the Senior Member, the issues remaining in the proceedings could not be resolved without a further hearing which could more efficiently be conducted by the Consumer and Commercial Division.
Although the Senior Member did not make express findings of credit concerning any witness appearing before him, a number of his findings would imply that he has formed an adverse view of the credibility of the owner. For that reason we consider that it is appropriate that the proceedings be remitted to the Consumer and Commercial Division of the Tribunal, differently constituted, for determination of the remaining issues in the proceedings according to law and in accordance with the above reasons: (Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2009] NSWCA 178; (2009) 168 LGERA 1, at [121]).
We note that it is usual to leave for the Division on remittal the question of whether further evidence should be permitted on the re-hearing. Given the grounds on which we have decided that the appeal should be allowed, we simply note that there was extensive cross examination of the central witnesses, including Mr Wallace, the owner and the two experts, and detailed affidavit evidence and reports. It may be in the interests of an expeditious and therefore cost effective re-hearing for the parties to agree to limit the extent to which any further evidence might be permitted.
Although the order that the builders pay the owner the amount of $26,505.62 in respect of defects is not affected by our determination of the appeal, as the owner's own calculation of damages acknowledges that, on a net basis, even if the owner is wholly successful, the builders will not owe the owner that amount, it is appropriate to stay that order pending the resolution of the proceedings.
[13]
Costs
We were informed at the hearing of the appeal that the Senior Member had delivered a decision on costs on 31 October 2018. As the foundation for that decision has been set aside, it is appropriate that that decision also be set aside.
It is also appropriate that the parties have an opportunity to make submissions concerning the costs of the appeal and we will make orders to permit that to occur.
Our orders will be:
1. Appeal allowed in part.
2. Set aside orders 1 and 3 to11 made by the Tribunal on 4 July 2018.
3. The proceedings, being applications HB 16/05215 and HB 16/38505, are remitted to the Consumer and Commercial Division of the Tribunal, differently constituted, for hearing according to law and in accordance with these reasons.
4. Order 2 made by the Tribunal on 4 July 2018 is stayed until determination of the proceedings.
5. Set aside the orders concerning costs made by the Tribunal on 31 October 2018.
6. Either party may within 14 days of the date of publication of this decision file written submissions concerning the costs of the appeal. Such submissions should address the question whether the issue of costs can be determined on the papers without a hearing.
7. If a party files submissions in accordance with Order (6) above, the other party may file written submissions in response within a further 14 days, such submissions should address the question whether the issue of costs can be determined on the papers and without a further hearing.
[14]
Endnote
We note that by reason of a discrepancy in the paragraph numbering, paragraph [112] of the decision directly follows paragraph [93].
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
[15]
Amendments
26 March 2019 - typographical error corrected on cover page respondents solicitor
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Decision last updated: 26 March 2019